Morning. You are watching the pulse. We are here in london. It is 9 00 now. We have a packed show for you. The quest for content, will be live in can we will be live in cannes. Jump, but it ditches its bid for tmobile. We will talk about that story. Is what isry happening in ireland. Lands to end the controversial double irish tax break when he gives his budget speech a little bit later. Michael noonan has been under pressure from the eu to face out this tax loophole used by companies google, apple, you know the names. They have been using this to their slash their tax bills. Is this what everybody is talking about . Domestically, no. For people here, it is that end of austerity after seven years. Much more focused on the prospect of a cut on income taxes. The focus would be on the double irish tax loophole. Taxes,es can avoid perfectly legal. The government has decided to preempt what is coming down the tracks. We have people like bono weighing in on the issue. The Irish Government has been very clear that it is not going to bow under pressure. It will not change its tax codes as a result of the view from brussels and london. Is this a climb down . Thing, what are we going to see . The 12. 5 or per tax rate Corporate Tax rate. In terms of what will happen, we will not see an immediate the lamination. Elimination. There will be a fiveyear period of phasing out. What the government is trying to do is get ahead of the curve. Why wait around for our reputations to be tarnished . Will there be compensation . Other more attractive ways of treating intellectual property . Clearly, they want these Big Companies to remain. Aboutwill all be revealed 2 30 p. M. Today. Bush thereout are some scare stories around. Lets look at the reality. A comfy like google a comfortable a company like google has spent money. Are they really going to pull out of ireland because of this . A lot of the Companies Moving here recently, airbnb and twitter, they do not have massive profits. They say theyre here for the talent, the englishspeaking talent around. The worry would be for irish authorities trying to track the bigger companies. We do not expect to see any massive pull off. Well be watching with interest. We will see we will be speaking to the former irish finance minister. His first interview of the day. Arguments in a german challenge to the ecbs bond buying land. Plan. German debt judges german judges expressed concern about the legality of this game. European economist. We are talking about the Bond Buying Program that mario draghi used a while back. It all fades into memory. So many of these things. Walk us through why today is so import and in my markets are paying attention. We have moved to a new phase in which the key concern is deflation. The motivation would be different from the one in 2012. In that respect, investors are more focused on the next stage. N the qe program of the ecb the fact that we are still seeing this legal battle suggests that if the ecb were to go down the road of qe on Government Bonds, there could be further challenges from germany. Case with the a Constitutional Court against qe. This for of resistance or attrition between the two sides. For those who want to preserve the integrity of the hero, euro believing that the ecb should support the Government Bond market. The government few is that the ecb should stay out and let sovereign spreads play their role in the market. Concerns in terms of the significance of this, if we are going to go down the road of qe, what were seeing here is the seeing here is the ecb defending the program. There are similarities. The details are different. You can draw a line between one to the other to the other. The inability of the ecb to pursue that, that is not the expected outcome, how big of below would that be how big a blow with debbie . Wouldow big a blow that be . There is an element of conditionality. By buys the front end of the market. It is a cause isis go operation. Quasifiscal operation. Qe is justified officially by the idea that when you are zero bound, you need to, date accommodate markets further. You cannot go to negative in terms of rates. The ecb has cuts rate twice. Beyond that, if you need further accommodation, you need to find something else, which is to flood the market with liquidity. I think on pure Monetary Policy grounds, qe would be more defensible than the omt. I think it is very interesting. There is conditionality surrounding the omt. The last press conference from mario draghi and he was talking about the assetbacked securities program, he talked about no program, no purchases. In the case of greece. I extended that into a qe program, maybe the ecb might decide to go down the same road as well. There may be some conditionality attached to that as well. Maybe they should avoid that. Difficult to avoid it. In that case, because we would be buying bonds at very low ratings, we would want the reassurance that these programs these countries are still in the program. Would you have to do the same thing with Government Bonds . Would greece need to be in a program . It is conceivable that the ec by what ecb would require a minimum requirement or something. Ways, it is very difficult to avoid this. Most people remember that at the , it was laterp revealed that the National Bank governance wrote letters to the countries involved calling for a series of reforms. Betweenpast the border pure Monetary Policy and Economic Policy. When they told these countries you need to tighten Monetary Policy and so on and so forth. The ecb is part of the troika. It decides what should be done in terms of Economic Policy. It is a very difficult line to draw where does Monetary Policy and . Policy end . I think we will continue with the germans arguing that the ecb should stay out and let the market operates. It looks like we are in for an interesting time i had. Ahead. Today. Hares rallying it has abandoned plans to buy a stake in tmobile. Lets get more on this. Investors initially liking the news. Lets walk through the reaction. Investors are liking the news. Shares are gaining 12 since the opening of the market. Investors are reassured that through, did not go tmobile was too big of a fish for the small french company. When they made the offer back in july for 33 a share, many investors were very surprised. It was the small guy trying to buy the big guy. One analyst said the offer sounded like a joke. The first offer was rejected and. Hen iliad decided to raise it again, that offer was rejected. The investors like the news. Shares, the biggest gainer on the euros stoxx 600. Next . T does he do clearly, the billionaire who owns iliad is very ambitious. And he kind of wanted to have a footprint in the u. S. Especially after he failed to grow in his home market of france. Earlier this year, he tried to get his hands on a telecom. Maybe some talks again about telecom on the table. Thank you very much indeed. Interesting times. Bloombergome, a lusive with the South African finance minister. Looking forward to that conversation. Welcome back. We will be speaking live with the South African finance minister. You do not want to miss that exclusive interview. Nhlanhla nene will be joining us. Everybody is paying attention to parliament next week. Lets get some details. Him tof pressure on deliver. The South African economy is in real trouble at the moment. Can you hold the line . The fiscal line is something everybody is worried about. It will be a tough budget. First debuted a first a few months ago he said tough times call for tough solutions. Act. Alancing we are dealing with very low economic growth, 1. 4 is what we are expecting. Most heart ofe the budget. Part of the budget. 1 abovef it is 7 wagen, around increases, there will be job losses. That is on the top of the list of mindful investors. It has been pummeled. It is really difficult. If the currency gap gets any bigger, people will start really getting concerned. Could it step up even further . Down 24 yesterday, dramatic as the market can get. The companys exposed to the currency, theyre experiencing volatility. A lot of companies are starting to move there had office to other countries. Ead office to other countries. Ebola, you say you have been traveling a lot. What is going on . Ive been to nigeria a few times. When i went in late september, gloves, Hand Sanitizer everywhere. They ask you all sorts of questions. Taken immense precautions to ensure they have contained it. They are doing screening at the airport and at the borders. More on that later. Live with the african south. Frican finance minister looking forward to that conversation. We back in a few minutes. I am francine lacqua. Welcome back to the pulse. Talk about audience and how you monetize. I am pleased to say we have a special guest. The president of the discovery networks. Billion nearly 3 customers. Great to have you on the program. We are in a slightly surreal surrounding. Nes, after all. People are pushing content. What is the game changer . Consumer behavior is changing. Consumers want access to more content on more screens. We are a content supplier. ,e distribute our channels where the number one paytv programmer in the world we are the number one paytv programmer in the world. More demand for video than ever before. That is an opportunity for us to meet the demand and find ways to deliver experiences that are audiences really want. The industry is going through immense change. Is there anything out there for you . Our growth has been built by our organic base. Our International Growth story is about 25 years old. Biggergrowing faster and outside the United States than ever before. , itus, the organic growth is still the bedrock of how we continue to grow. Selectively complemented with acquisitions if they make sense. Our growth is an organic growth story. You do not feel like you are in a race to get bigger . We are in the business of delivering experiences that satiate the audience desire. We want to grow audience share in all of these markets where we operate. If there are other companies that can complement that, we will look at them. We are also launching new programs and new channels. Investigation discovery was a brand that did not exist in the United States five years ago. It is a number four network for women in the United States. We will be in 100 million homes by the end of the year. Taking channels, developing them internally and then taking them around the world with content that we own. Ask great to have you on the Program Great to have you on the program. That was the president of discovery international. Discovery international has more views and viewers than discovery u. S. And that is a real game changer. The u. S. Will take the second place to china in five to six years. Welcome back. The u. K. Inflation numbers are out. Are we going to get a rate hike anytime soon . The number for the u. K. September inflation rate, 1. 2 . The median estimate was for a figure of 1. 4. The pound was already selling off. We are tracking even further down. You have seen not only the prospects of a fed rate hike at the beginning of next year being taken off by the markets. Take a look at what is happening in sterling. Rate, down. 63 . That is good news if the wage story is what you are concerned about. It is not good news if you are concerned about the broader deflationary story. I will press a couple of other buttons and take you to another story. The jpmorgan numbers seem to be out. Earlier than we expected, two or three hours earlier. We will try to check to make sure these numbers are real. Check the veracity of what we are getting. They represent on an adjusted eps basis a significant mess. Significant miss. Already at the backend of the range. Iss. A share is a m linenificant legal expense. That is a one billion item on the expense line. These banks increasingly faced significant litigation charges. The numbers appear to be out. They are out early. We want to caveat it a little bit because when he to double check. Because we need to double check. The other thing i want to bring you is what is happening in germany. And ebola patient in east of the country, this clinic confirming the death of and ebola patient ebola patient. Hans nichols has been tracking the story. Hopefully, we will be speaking with the South African finance minister shortly. Storytalk about another we are tracking. The u. S. And europe continuing sanctions on russia as a result of what is happening in ukraine. Putinactly what president would like to have seen. The chinese premier in russia to meet with president vladimir putin. Ryan chilcote has the details. This is not what he wanted. What the russians want as a result of the sanctions as funding and trade. What the chinese want our weapons and russias commodities. The chinese are at an advantage because their desires dont have the urgency. Russia is isolated by the sanctions in the last. This relationship between russia and china has become personal for the russian president. He has met him nine times since he became president of china. This meeting at a rate with the Prime Minister is a way of bolstering that. It is a protocol meeting. We wont get a very good read out from it. They are talking about big geopolitical issues. Russias antimissile system that they are ready, in principle, to sell to the chinese. It gives the chinese control over all of taiwanese airspace. It would be within their reach with a range of the s400. Plus the new russian fighter jet. Haveind of reluctance they , they would be worried about the chinese reverse engineering these. Technology. E it is amazing. The only way you can fight the problem of her thirst reverse engineering is to make sure you sell a lot of the planes upfront so that if they do reverse engineer it, you have the lions share in your cell. Another way is to have strong ip agreements. They have been strengthening their intellectual property agreements. Yesterday, they had this part where they tell the journalists 38 deals and all. Including one in the highspeed rail space. Agreeing to work on highspeed rail, which i found interesting. What about the currency story . Yesterday, they announced uanruble swap deal. Get rid of the middle man, simplify things and to bolster the importance of their own currencies. For the chinese, they have been doing this with a lot of different countries. They have done it with the ecb, brazil, the swiss. They have done this with the russians. It is a smaller deal than what they did with the ecb last week. The russian ruble has been depreciating in a dramatic way. Something in chinese are not too enthusiastic about it. The moscow exchange, they changed the youan. To 367in comparison billion of ruble dollar swaps. This is a marriage of convenience. These are not two parties necessarily really in love with one another. For the moment, they are finding it quite convenient to do business together. Irish,ing the double with the finance minister cave into pressure to close the tax loophole . Welcome back. You are watching the pulse. We think we have the jpmorgan numbers. A were out three hours earlier than we were anticipating. For Immediate Release and appears to be the jpmorgan details. We can only hope and pray that these are the real details. Lets assume they are. It looks like on an adjusted eps line, we have a slight mess. A slight miss. Fairly substantial hit on the legal line, around the billion in terms of the surrounding the heads on the legal line. Tangible common equity. It looks like we have the jpmorgan numbers. Theyre out early. Irelands finance minister outlines lance to end the controversial outlined plans to end the controversial tax break. Michael noonan has been under pressure to phase out the tax. The double irish has come to symbolize flaws in the International Tax system. How does this loophole work . U. S. Companies licenses its intellectual property to an irish company. Legally based offshore. Like in the sun kissed bahamas. They license the rights to the second irish company. Blarney corp. Receives income and it pays next june no taxes because they are offset by royalties and fees. Uncle sam pays no federal taxes on the income from his irish subsidiaries because the earnings were not made in the u. S. And it all adds up. That was up 12 from the year earlier. That equates to annual revenue loss to the u. S. Of over 90 billion. U. S. , the u. K. Chancellor, george osborne, mentioning this in his Tory Party Conference speech. Is a multifronted war and eric schmidt is back in berlin trying to soften googles image. What google does is if youre going to buy an ad in france, you buy the ad in france and populate on a french webpage. The annual payment is to a Google Company based in ireland. Google Ireland Limited pay royalties to something called google netherlands holdings. They returned the royalty is and they pay us some over to a Google Ireland holdings. In that company is located in ireland, but it is registered in bermuda, where there is zero income tax. Ar google, this means Corporate Tax rate of about 2. 4 . They have saved close to 3 billion during this. It is not just the double irish. It is also the dutch sandwich. Smart creative accountants and this is the challenge for google going forward. It is not just the eu cracking down on this. Theres a greater smart creative accountants and this is the push towards tax harmony. It is going to be a challenge. For google, they are on defense. They are on defense over privacy, the right to forget. A lot of different fronts for googles to battle on. It looks like they have some push towards tough times ahead. With the story there will be a debate later on. Eric schmidt will be in permit. Last night, he gave a speech in talked about innovations. When he comes to germany, he is keen to promote and talk about the start up seeing here. Scene here. The ecosystem can compete on its own. There are a lot of competitive issues here in germany. Last night, his argument was againsts not competing yahoo . It is competing against amazon. That is how they want to change the terms of the debate. How popular is google in germany . I have read a series of articles which talks about the fact that the germans seem to have an issue with google. Put it in context for us. The biggest Search Engines are a must 90 of google. Here in germany, it is on the upper end of the 90s side. It is in the upper half of the 90 percentile. I do not want to use monopoly, but they have significant market capitalization. It is quite ironic given that interviews and people on the street, theyre very much suspicious of google. The german consumer clearly likes google. A bit of an irony. Hence nichols on the google story hans nichols on the google story from berlin. Joined by a former irish finance minister. Welcome back. You are watching the pulse. Michael noonan is under mounting pressure from the eu and individual countries to phase out this tax loophole used by companies such as google and apple. Lets talk to a former irish finance minister. Good morning to you, sir. Ireland willt that not change its tax policies because the pressure from within the eu. If this double irish goes today, does that constitute something of a climb down . I would think so. We are expecting to hear that the double irish will be faced out over a period. I think the Irish Government is trying to show some get a big ahead is trying to get of the criticism. I think it is a rather weak addition to take. Many tax arrangements have been criticized recently. There have been lots of complaints from the United States and from other countries. When you look at the United States, the prospect of any tax reform there seems to be rather remote. There is a farmer constructed way thats constructive way of going about this. There is a fair more constructive way to go about this. Important in the case of some of the firms you mentioned. Google, apple, and others, where there is clearly in need for greater International Agreement on how to treat payments. Part of theig picture. Other countries need to reform. Can it be argued that mr. Noonan is being smart here. He had the option of selecting the arguments. He can compensate for it in other ways. Clever ways of making a country that is still very attractive. Getting rid of this one particular loophole allows him to deflect some of the attention away from ireland. That is his way of getting ahead of the criticism. I am not sure he has any guarantee that there would be a quid pro quo for this in terms of how other countries organize their systems. We will have to wait for a measure of agreement. Can he do that internally . We are getting rid of this tax loophole, but we will create incentives over here. Being ahead of the criticism, he can still leave ireland in a very good situation. It removes the focus of attention he does not need the other countries to change. He just changes the focus internally within ireland. If he changes the focus internally within ireland, that is an imitation to other anntries not to do invitation to other countries not to do the same kind of thing. The position in the u. K. , to tweak things in their favor. All of this problem comes from the fact that is various points in the past, they have tweaked their tax system in order to get particular advantages. See a more say collective and a more concerted approach being taken for this. Things seem to take forever to get done in g20. Concerned it has been very clear that there will be no change to the Corporate Tax rate in ireland. That is the danger. If everybody starts sailing ground, they should have failing ground, they should have some kind of assurance that other people will move in the same direction. I do not see any evidence of that so far. Looks interesting interesting to get your views. Those listening on bloomberg radio, first word is up next. E have the jpmorgan results bps line looks a little bit mixed. Talk totill hoping to the South African finance minister. His budget is next week. We will be having an exclusive interview with the christies ceo. We will get his take on technology and the competition with other these. Southebys. In can he back nes with francia lock lock. We will see you on the other side for all of this. Downing to double irish. Text giants like google and , the irish loophole is being closed. A South African exclusive. We speak to the finance minister about his first budget and the impact of ebola. Markets for masterpieces as christies kicks off frieze week andweek talked to the ceo another exclusive interview right here on the pulse. Good morning to our viewers in europe, good evening those in asia, and a very warm welcome to those just waking up in the u. S. Im guy johnson. This is the pulse, live from london. Be aay starting out to busy day. Some data from the eurozone. Zew. Trial production and zew, Investor Expectations gauge. Expected to come through flat at 0. Weve had a reading of 3. 6. Than anticipated. The data of late are coming through worse and germany. This is a continuation of a trend. This is a survey and less important than the ifo number. Data from the Industrial Production, 1. 9 on the year. 1. 8 one month ago. Negative numbers. Eurodollar at session lows, 1. 2674. Theres the number. From the year is on. Things happening with the eurozone, we just had greek de bt. Back above 7 . The lodi highs during the height of the debt crisis below the highs during the height of the debt crisis in greece. Naked news from the periphery of europe. Negative news from the periphery of europe. A fight ever tax. Irelands finance minister set to outline plans to and the double irish tax break. Michael noonan under pressure from the eu to phase this out. Of big pharma companies, google, and apple user to reduce tax bills. International economist this looks like the focus of the event in dublin. Domestically, people are more focused on the end of austerity. Aboutationally, it is all the double irish. This is the strategy used by Multinational Companies to avoid tax by routing it through ireland offshore and then back again. Looks like Michael Noonan has agreed to end this strategy. We had former finance minister said this was a weak decision by the Irish Government to give in to pressure from international organizations. Given that a lot of this is down to legislation not flowing out of the u. S. That is one take on how the government is giving into pressure. His concern was that this is the thing and of the wet. Increasingly, we may see the tosh government folding international pressure. Weve seen government after ideanment clear on the that it will not increase the corporation tax, which is very low. Is there reality that this is th e thin end of the wedge . I have no doubt the 12. 5 rate will remain. I cant see any change in the next five or 10 years. Its a cornerstone of our industrial policy. We will see tweaking at the edges. We will look at a lot of headlines around the end of the double irish. We will see the phasing out of her five years. In 2015, companies will have to getgether time their taxes in order. There may be opportunities for companies to reduce tax bills and other ways. There has been headlines but we to got to wait until 2 30 see what the detail is. It could be a cosmetic change that is not going to affect companies. Its too soon to proclaim the end of double irish. We will have to wait for details. We look forward to hearing about it. Thank you. Our Dublin Bureau chief. More on the double irish. For google, a multifront war, eric schmidt is back in berlin chung to soften googles image there. Eric schmidt is on a charm offensive. Is not as an explanatory offensive. He was talking about how amazon is the real rival of google. Couple months ago they open a factory in berlin and i talked about how there are so many great competitors and germany that they do not need states that please. He has got the antitrust case from 2010, he has privacy cases, now he has a tax challenge. Lets look at how the double irish and the dutch sandwich works. If you are in france and you buy ad space on google, you send the money to an Irish Holding Company google Ireland Limited. Google Ireland Limited transfers royalties to google netherlands holland. Listed in that Company Transfers royalties Google Ireland holdings, which is registered in ireland but is it is domiciled in ireland but registered in bermuda. Zero income tax for google. A 2. 5 global rate. Saved by these gymnastics. Arly, ireland is moving. George osborne has been critical of google. Seems like the evidence is mounting and public sentiment is mounting against google. Hans nichols in berlin, where an schmidt, the googles, finds himself. What else is on our radar . Travelers through he threat might face delays. Passengers arriving at the london airport will be screened for ebola. Health secretary jeremy hunt says he expects britain to face a handful of ebola cases in the coming months. Iliad scraps its plan to acquire a majority stake in tmobile u. S. Of new offer was for 67 tmobile and valued the stock at 36 a share. Has priced itsse thirdquarter net income at 5. 6 billion. The Bank Released numbers of little earlier than anticipated. Ps line is a bit of a mess. An exclusive. Financeh south africas minister. Everything from his countrys Economic Performance to the threat of ebola. Hes about to deliver his first budget. We will see him in a moment. Good morning. Welcome back. Lets talk about a bloomberg exclusive. South africas new prime finance south africas new finance beister, nhlanhla nene, will joining me. Since he took the role five months ago, nene has hit the ground running. He is dealing with strikes, a slowing economy, a tough gig. He is with me. Thank you for taking some of your time. Which im sure is precious. How tough is it to put this budget together . Is tough. I dont think weve had it easy in the past. For been in the treasury the past five or six years now as a deputy minister of finance. When we came in and 2000 nine, it was the onset of the Global Economic crash. Period, with all its difficulties. We are faced with a new set of challenges. With downgrades and a contracting economy. At that time, we had fiscal space. To we took a which ran its course. We are of the view that we no longer have that much fiscal space. We need to actually apply much rules. Rict fiscal thinks the reason why we this mediumterm budget policy statement we are tabling needs package thatscal addresses the challenge. Youre not going to tell me what is going to be in the budget, which would be nice. You howdeficit, big a struggle is it to keep it from not expanding . Not getting greater than 4 . Is a big challenge. While we need to protect our critical expenditure in key areas, we also are struggling side. He revenue it is a tight ship. Pacave put together a kage that i believe will see us through. We need to look at both sides. Continue to protect those key expenditure areas. Particularly investment needs to. E protected social infrastructure needs to be protected. We need to postpone some expenditure and continue to make held in some deficiencies in the manner in which it was spent. We need to look at how best to have deficiency in tax collection. Weve received recommendations from the Tax Committee established by my predecessor. We have not reviewed our tax 18 years ore past so. We are going to be looking at what recommendations can be put in place. That will keep the deficit from growing . That will contain the deficit. That is why we are proposing the lowering. The lowering of the ceiling. Over the last three years, it was moderate growth. What we are doing now is lowering that ceiling while protecting the key expenditure areas. One of the things everybody is watching is to see whether or not you can find some sort of a deal. You do not want to get a significantly above inflation wage settlement. The unions are asking for significantly more than that. Where is the middle ground . We always depart from such bid wastheir opening 15. Not goingg bid, im to say it, is very low. Will have to find a middle ground. They point we are making there is that if we have to settle for plusing above inflation one, we will sacrifice the headcount. Which is undesirable but that is what we will have to do. We are engaged in the Public Sector. Our engagement in the Public Sector is not only on the percentage increase. We are looking at working conditions. Commission where rules are established that looks at other working conditions. So our engagement is not only which based. Not only wage based. We are looking at productivity to see how we could strike a seal that as well that farew well. It is difficult to carry a higher wage bill, if we carry a higher wage bill that was supported by productivity. Lets shift focus. Has come down. It has cheap and significantly. In some ways that is a good thing, in some ways bad. The inflationary story is a serious concern. The previous legs lower, the path through the cheaper rand to inflation has not been that high. Through isthe path more aggressive. How concerned are you and your government, the central bank, about the effects of the inflationar . We are concerned. That is why the coordination between the fiscal policy and Monetary Policy becomes critical to our engagement at, our are looking experts. That is why it is important to invest in productive capacity. If our exports are able to offset that, we would be more comfortable. The price of brent crude has stayed low. Take comfort from that part of it. It is something that is of concern. Do you feel in control of this . Do you think what happens with your economy is something you can get a grip on . You can probably control the current account deficit. What happens with the fed . You effectively having to set out some of your Economic Policy to what happens in washington. I remember talking to your predecessor, he was worried. We are concerned. The external factors are significant but most of the challenges that we confront our domestic. Those are the ones we focus on, domestic challenges. The ones of financial constraint. Making sure that there is peace in the workplace. We beef up ourt productive capacity, we accelerate our infrastructure. At the end of the day, it all lies with a growing economy. If the economy grows, if there are external shocks, this shocks are mitigated much easier if the economy is growing. Can you keep the current account deficit from getting bigger . When people talk about south africa, they talk about the current account deficit, that is the problem. Decomposition of the current account deficit has mainly been impacted by our impulse for capital investment. That has not been a very bad with that. K that car is ok. It cannot stay like that for too long because it becomes unsustainable. We are working hard at making sure we need to beef up our exports so that we can be able to mitigate and offset whatever comes. South africa is a long way and sierrauinea leone. How much of an effect are you feeling in terms of peoples perception of investing in africa as a result of ebola . The perceptions have not been healthy. People, africa is a country. It is not a country. We are miles apart. Ofth africa is also part finding a solution. Even though they are miles away from us, if we do not act just to contain it within the three countries, and also to assist those countries in making sure the epidemic is contained, we also would be fooling ourselves. Tourism industry has reported that numbers have gone down because of perceptions. Also because of some of our flags flying through west africa. It is something that we take seriously even though it is away from us in terms of distance. We feel that as a cotton that we need to Work Together when there are challenges we feel that as a continent we need to Work Together when there are challenges. Thank you very much. Minister ofe, finance in south africa. We will take a break. Iliad shares jumping as it ditches its bid for tmobile. When we come back. Welcome back. Lets talk about iliad inndoning plans to buy stake tmobile u. S. Caroline connan in paris. What to we know . Reinvest investors are reassured that the deal did not go through. Take away from elliotts focus at home. Shares are jumping it would iliadsay from focus at home. Shares are jumping on the stoxx 600. If you look at iliads shares jumped. Ly, they had many investors sought may ig. Obile was to b rbc capital and kipling raising accommodations raising recommendations. What will Martin Bouygues make of this . Shares are up. Been eyeingle has telecom. Iliad tried to get their hands bouygues telecom. There is speculation about more consolidation in the French Telecom sector. Things to watch and stories to be broken. Fascinating stuff. Caroline connan joining us from paris. What else have we got on the pulse . Another exclusive. Live with the ceo of christies. Forussing the market masterpieces. It is frieze week in london. Good morning. Welcome back here you are watching the pulse. Johnson. Ondon, im guy top headlines. Travelers flying through heathrow may face serious delays. Passengers arriving will be screened for ebola by being questioned and having their temperatures taken. The Health Secretary says he expects britain to face a handful of ebola cases. Mario draghis pledge to do goes on trialkes before the eus top court. Whether the eu overstepped its power in 2012 to buye omt mechanism the debt of stressed countries. The program has never been deployed. Scholars say the court is unlikely to overcome it. To overturn it. Se posts anha income of 5. 6 billion. Releasing numbers earlier than planned. On in the markets. One man to talk to, jonathan ferro. So much going on. Jp morgan earnings come in earlier than anybody anticipated. The earnings for the u. S. Are going to be key. The biggest threeday draft for the past 500 since 2011. Down almost 5 in three days. Jp morgan numbers, a slight miss on earnings per share. Citigroup, wells fargo, tom keene and surveillance will bring you through. Here in europe, no let up. The selloff does not rest. Ftse 100 down by. 7 , dax down by. 8 . Losses on the ibex. If the earnings are not in prison, the data in europe is failing to impress as well. Drop. Of germany, a Industrial Production out of the euro zone, a drop of 1. 8 . What does it mean for the bond market . Bond yields. 10 year yield, 0. 86 . The other big move is a move in basis points higher on the 10 year. And move above 7 for the First Time Since march. Financialsncerning in greece. They plan to exit a a lot program, against the wishes of opposing eurozone finance ministers. The big story and Commodity Markets has been brent. Fairly in firmly in a bear market. Down 1 . Demand weakest since 2009. U. K. Inflation earlier, a drop to 1. 2 . You have neighbors in the eurozone. The economy heading towards recession. What does that mean for the u. K. . One pound south of a dollar. After we could than expected u. K. Inflation data. The one question everybody will ask, the bank of england, the first major centralbank to hike before the fed . At the sterling, the market has effectively priced out the possibility of an early rate hike, he from the bank of england. It is doing the same when it comes to the fed. Pushing the rate hike further away. Will eithertion is of them as the data gets worse and worse actually end up hiking rates aggressively next year. Short sterling, that is the rate. Lets move on. From the market to the french riviera. Would ratherone i focus on. On the riviera you have got a bunch of smart guys in the Media Industry talking about what is happening. The worlds Top Media Companies are gathered and cannes for one of the key events in terms of distribution of content. Ng content, sounds and programs you and i love. Only one person to talk to about this. Francine lacqua is there with another great guest. Over to you. If only the riviera at work were only the riviera sunny. Broadcasters, network producers, producers and talent. Rom fireme caroline f international. Thank you for joining us. Your industry is going to a consolidation phase. Technology is growing and people are playing catchup. You have been on the acquisitive chtrail. The big thing is the digitalnce of web and platforms with broadcast television. From nickelodeon to mtv to Comedy Central, something we have been focused on since shows like icarly in 2007. Absorbed that, particularly in kids and family. You are not seeing launches that do not have everything consolidated. Nds, like dora and frie that builds on dora the as well as the success when that lodged in the state. When that launched in the states. We simultaneously launched an app which became number one. Were you surprised at the change . In the last two or three years it has been a game changer. What has driven the interest is the viewers. In many cases they are preschool viewers. A 2 year olderes old, they are consuming things regardless of platform, an ipad or television. That young part of our audience has said we demand things to be available on all platforms, when everyone whenever we want. Toddlers estrin centers toddlers as trendsetters. M ahing in the cards for and viacom. The channel five u. K. Acquisition had a big price tag. What next . Making sure we generate value from the acquisition. The mood his high in u. K. , im based in london, where 10 of viacoms Global Workforce is based. We are looking at what can we do with that acquisition. A couple things have been announced. E channel, the first outside of the u. S. , extremely exciting for viacom. Also on the kids programming side. One of our shows Just Launched this saturday in the u. K. We are looking at driving maximum results through that acquisition that we are happy about rather than what is the next thing. If i ask you what the next thing is in terms of programming, let it be fair to say it is comedy and kids . We work across general entertainment, kids, and comedy. We have long been renowned for platinum content for kids and family. Weve become increasingly famous for what we do on the comedy side. We represent Comedy Central internationally, that includes hits like south park. What weve become known for is growing talent. Six months ago we brought amy poehler down here. Showirls who created the are highprofile. Togrew Stephen Colbert become the David Letterman replacement. Weve become a significant home for growing talent. We had a big ben stiller project coming. We are home for the best and the biggest and comedy. How excited are you about webisodes . That is top of mind. We grow shows with webisodes then take them to broadcast. Has like drunk history become something we are taking at internationally. The first rocket will be u. K. The first market will be the u. K. Growing talent online and then giving it a chance in the market. Caroline of viacom. Web,you grow shows on the your cost is lower. Ive seen the childrens show. A language i understand. How the media is changing. Fran having fun in cannes, de spite the rain. Arent you . I am. Ou walk around, there are so many people doing different things. You get to have a glimpse of what you will be watching next year or the year after on tv. Looking forward to hearing all about it. ,t might be raining in cannes the stars are out. Francine lacqua will be back in a couple days time. Frieze week in london. The market for art masterpieces, we discuss with the ceo of christies. Steven murphy. Coming up after the break. Good morning. Welcome back. Youre watching pulse. Live from london on bloomberg television. Talking about another bloomberg exclusive. Christies has sold 75 million of contemporary art, postwar era art. Theze week is one of biggest concentrations, the biggest concentration of art in europe. Seems to get busier and busier every year. Joining us as christies ceo steven murphy. Good morning. Good morning. It is a heck of an event. I remember the inception and that was smaller and not massively well attended. Event. Ow a mustbeat can it continue to get bigger . Frieze weekto the people. Fares andof the best the world. It brings clients from around the world. And other auction houses set up auctions. There are seven fares going on in london, 150 dealers are having special events. Nine auctions. Are in the art world and went to be in gold in the world of contemporary, you are in london. Do you feel you sit atop all of this . Is your business number one . You have; art you have some incredible art. Grip . Feel youve got a since we are in london, dubai for the weekend, shanghai next week, new york following, and then hong kong you personally . I do most of it. After hong kong, we had geneva and then paris and then mumbai. The jet stream is moving around. Christies is proud to be the number one position. The team has and it. It is three years and running. We are there because we have expanded into the geographic markets and online. Week has brought a world of arc and the people who love art into london with events. The rest of the world can participate online. What we did was not fashionable five years ago. I did not even remember that the ipad was launched in 2010. What tablets have done for art is, when we look back 10 years from now, a moment when it began to explode. Apple expected to unveil a new ipad with Screen Resolution going up. Is that the critical factor . The detail you can see . A combination of the fact that one can comfortably look at a fantastic image of a piece of art. If you are a collector, you need to see it in person. You can make decisions and know about it and the information is realtime. Year, ain shanghai last concept. Consigned from europe and brought to shanghai. Sold back to a european who bought it online. We have 14 exhibition spaces around the world. Where we exhibit the art. Some it can be experienced. And we have grown our accessibility to clients through the online experience. The bigger you get, the more momentum and more technologically brilliant you become. Does that create a Virtuous Cycle . People were surprised when you got the collection from under of these how did you achieve . There, does it get better and better the bigger you become . Auction50 years, the 2 houses were in competition and pretty much 5050. Houses onon the 2 each other competing was a bit myopic. What we have shifted is to look at the client. Anding the most buyers serving the most buyers creates a higher sale result. Last night we saw the collection with over 90 of lots sold. That is the key metric, how well did we do with . Do with the client . The collection, we are proud of it. That is what attracts the client. The reason the art market is booming. The economic climate for dims, art will continue to grow. People are moving towards the acquiring of art and it. Our job is to serve them and find them. 48 of our registrants for all auctions do so online. of those are under the age of 45. Most of them are new to christies. Getting bigger. You have something called the james map. Yes. How did you find out about that . It is about consumer data. The think of yourself as a big did a company . I read literature in college but i am a secret geek. Data, the economics of the model. When you have a Company Working in all these markets, we serve our customers best when we know how they fit into the map of their interests. Data research, you find out amazing things. When we do research, if theres , it is badise research. Our top clients, on average, buy in 7 categories, not one. Kept a Broads Church of categories. Post were the start postwar is the star, growing 20 a year. Luxury wine, watches, andlry, grew 12 this year brought new buyers. Do you think that will continue . Think you are immune. There is a bigger aggregate market. Wine, watches, etc. Fits in, it vibe in terms of the market we are talking about. Burberry was out with numbers later today. Lvmh they will tell us that the Global Economy is slowing and chinas demand is waning. Are you feeling that . Are you feeling any element of the slowdown . The perimeter is getting bigger, there are more people to serve. The behavior of the consumer at the top end is more comfortable buying online and more comfortable coming into christies. Weve worked hard to make ourselves accessible. The carbonation of geographic expansion and accessibility, through our doors, we are officially opening our building in shanghai next week. Through our doors and through your ipad. It has opened up the world for people to come in. The christies brand, is it means anything, it means authenticity. And that what you see a what we say is what you are going to get. At has been a big factor in people choosing to purchase wine, watches, and jewelry at christies as opposed to elsewhere. Nice to see you. Good luck with the jet lag. Steven murphy, christies ceo. We are going to take a break. Back in a couple minutes. Good morning. Youre watching the pulse. Live on bloomberg tv, bloomberg. Com. Lets wrap up with a look at what is happening in the pound, wow, a big drop earlier. 953 is where we are treating. Latest inflation read at 1. 3 . Look at the sterling, a gauge of how the market expects Interest Rates to work going forward, the market is pricing out, increasingly, the rate hikes we were expecting from the bank of england. Tok to height rakes tough hike rates when its going in this direction. Oil, let me show you was happening with crude. Wti brent, brent down 1. 06 percent. Trading 87. 95. China to figure out what is going on in the greek bond market. Greekeat 10 year the 10 year above 7 . The price going down. Up by 37 basis points today. You can see it across. Look at the shape of the curve changing. Ms. Happening in the greek bond market. Equities under pressure. Some evidence 80 we would get a some evidence may we would get a buy, does not seem to be coming to fruition. European markets being battered. A busy day continues, jp morgan numbers out earlier than anticipated. Surveillance in new york with tom keene at the helm will be running you through the details of what you need to know about that. See you tomorrow on the pulse. America confronts the ebola virus. Even one infection is unacceptable. Jpmorgan cu releases its dish jpmorgan cree releases. Yields continued to plunge. Markets on the move. It is the new volatility. Good morning, this is bloomberg surveillance. We are live from our World Headquarters in new york. It is tuesday, october 15, i am tom keene. Joining me, scarlet fu and adam johnson. A set of top stories for you this morning. We begin with jpmorgan, comes up short and early release. Missed analyst estimates. Net income rose to 5. 6 point dollars. Set aside 1lso billion for legal expenses. The shares are down in premarket trade. Later, ceo Junie Jamie Dimon is expected to be on a call with analysts